Developers are pouring more and more money into projects which are increasing Newcastle’s population density, and not just in the inner-city.
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Council figures show Newcastle and Lake Macquarie approved more than $800 million worth of dual-occupancy, townhouse and unit developments in the last financial year, a staggering 220 per cent rise from $250 million just four years ago.
A Newcastle Herald analysis of council data shows the number of dual-occupancy development applications, where a single house is demolished and replaced by two townhouses or villas, has exploded in the past two years.
DAs for these developments in Newcastle numbered 55 in 2012-13, then 73, 74 and 86 in the subsequent three years before rising sharply to 182 in 2016-17 and 161 in 2017-18.
It is a similar story in Lake Macquarie, where approvals in a range of medium- and high-density development categories ballooned from 106 in 2013-14 to 225 in 2017-18. The annual dollar value of these developments grew 324 per cent over those five years, from $45 million to $191 million.
In Newcastle, new support for units and townhouses and the rush to cash in on rising land values have contributed to total annual investment in higher-density building leaping from $174 million in 2014-15 to $613 million last financial year.
This rise in higher-density development projects mirrors the “in-fill” strategy central to the Greater Newcastle Metropolitan Plan, a key state government planning document.
A draft of this plan issued last year said the Lower Hunter’s population should rise from 540,000 to 700,000 by 2036 and that four urban growth corridors should radiate out from the Newcastle city centre.
These corridors cover large parts of Adamstown, Broadmeadow, Merewether, Mayfield, Lambton, New Lambton and Mayfield.
The metro strategy suggests councils should amend planning rules so these suburbs assume the population density of Cooks Hill, an inner-city area with a mix of terraced, detached and semi-detached houses and low-rise apartment blocks.
The projected population rise in the Newcastle local government area, from 165,000 to 198,000, equates to a target of 16,800 new dwellings, the vast majority of them, 14,300, as in-fill developments in existing urban areas.
In Lake Macquarie, 8900 of 13,700 new dwellings are ordained to be in-fill development.
The push for higher densities is designed to make the most of existing infrastructure, such as roads and schools, and cut down on the type of urban sprawl that has turned Sydney into a traffic, transport and political minefield.
But that strategy often comes at a cost for people in established residential areas which have not traditionally accommodated apartment complexes and other forms of medium- and high-density housing.
The Herald reported this week that the developer behind the 84-unit Foundry complex in Adamstown had taken the council to the Land and Environment Court over its deemed refusal of the proposal, which exceeds height and floor-space-ratio limits for the area.
The apartment buildings, which would replace six houses on Brunker Road and Date Street, attracted more than 70 objections typical of this kind of development, including concerns about height, parking, privacy, overshadowing and a range of other issues.
Sue and Wayne Morris live in Date Street, two doors down from the proposed units, which they see as a gross overdevelopment of the site.
Ms Morris said the tension between developers and nearby residents would be a story played out across Newcastle as property owners took advantage of the government’s density strategy.
“We knew something was going to get built there, but there is no way that we expected 84 units on six blocks of land,” she said. “It’s too tall. It’s actually eight storeys in Date Street.
“I can’t be too harsh on Newcastle City Council because they’re in court fighting on our behalf. They didn’t just rubber-stamp it.”
Ms Morris agreed with the concept of increasing population density but said governments had to ensure infrastructure kept up with the pace of in-fill development.
“You’ve only got to look at the Adamstown gates, which is an absolute joke,” she said. “We laugh about it, but it’s not funny that a 70-year-old problem is still there.”
The Herald’s data analysis shows that Merewether, a relatively large suburb with high land values, was the most popular area for dual occupancy applications in 2017-18 with 23.
Fletcher, one of the few greenfield suburbs in the Newcastle local government area, was next with 22, followed by New Lambton (13), Mayfield (12) and Wallsend (10).
The number of DAs for larger multi-unit developments peaked at 169 in 2015-16, and many of these are now under construction or completed.
The total dipped to 83 in 2017-18, but these proposals still amount to 768 new dwellings in the Newcastle LGA. And, despite the high profile of big apartment redevelopments in the CBD, the bulk of these proposed units will be built in the suburbs.
Judy Preston lives in Merewether Street, Merewether, where workers are putting the finishing touches on the 37-unit Oceans Reach development on the corner of Llewellyn Street.
The retired Dulux colour consultant grew up in a house in Llewellyn Street and believes the four-storey apartment complex is an overdevelopment of the site, even though she is decorating one of the units for a friend who is moving in.
She knows three women from the local Probus club who have bought apartments in the building.
Growing up here and seeing it like a community, I don’t like the change.
- Judy Preston
Ms Preston said she appreciated the arguments for increasing population densities but did not like to see her neighbourhood change.
“I never thought it was meant for this sort of thing, really,” she said. “I just think there’s never going to be parking out the front here. There’s no parking now.
“Growing up here and seeing it like a community, I probably don’t like the change. I just don’t think that was the place to have that type of development.”
Another significant factor driving a rise in population density is the growing popularity of granny flats, largely fuelled by Sydney investors.
Backyard Grannys director Mark Neumann estimated that the industry was building 300 granny flats, which often do not require development approval, each year in Newcastle and Lake Macquarie.
His company is adding a new staff member every month to keep up with demand.
“People that we know – friends, family, ourselves – are doing this because it’s a good way of making extra income,” he said.
“And there’s a lack of affordable housing out there for people at that $350 a week for a two-bedroom place to live.”
Mr Neumann said only about one in five granny flats were built for homeowners’ elderly parents, although this ratio was growing.
“It’s about 80 per cent investors and 20 per cent for mum or dad in the back yard.”
A recent project his firm had completed at Cardiff was typical. The owner had paid $560,000 for the three-bedroom property and spent about $130,000 to build a granny flat. They had rented out the house for $420 and the granny flat for $370.
“The numbers stack up for an investor. A lot are from Sydney, 50 per cent. Sydney prices, to buy a cheap investment property out at Penrith, you’re still going to need $700,00, $800,000.
“Most are mum and dad investors and they’ve got a life coach or a business coach and they’re reading magazines. They’re not guys who are going out and buying 30 or 40.”
Mr Neumann said the granny-flat investors were playing a part in driving up house prices.
“If it’s got a big back yard and it’s accessible, those prices have gone crazy.”
Newcastle Greens councillor John Mackenzie, who is a supporter of increasing population densities, said it was a challenge to balance the interests of residents, developers and the environment with urban planning objectives.
“Not everyone’s a winner in this. That’s the balancing act,” he said.
“There are 32 apartments going in in my street in Tighes Hill. It’s been hellish, and the parking situation around school time is going to be absurd. But at least for that area that was what was intended.
“You can domesticate those proposals to an extent. There’s no one size fits all. That’s the key thing at that upper level of planning about where do we want that high density? What’s the areas that can accommodate it in terms of traffic flows, availability of schools, access to transport?
“Densifying is something you want to work towards because it minimises all your greenfield development in areas you’d rather see kept as bushland.”
Lake Macquarie City Council’s manager of integrated planning, Wes Hain, said the council had a strong focus on increasing housing choice as part of its Lake Mac 2050 Strategy, which is on public exhibition.
The city’s population is expected to grow by more than 23 per cent by 2050 to 250,000, and the number of dwellings will increase over the same period from 82,595 to an estimated 112,400.
“We are already planning for more diverse housing to meet this need, particularly in and near our town and local centres,” Mr Hain said.
“Council encourages medium-density development in town centres as the higher population concentration contributes to the development of better services in those areas: improved public transport, a more vibrant day and night economy, more jobs, and more health and essential services.
“It also caters for people who prefer to live in lower-maintenance dwellings, with good access to services and entertainment and lifestyle options.”
Newcastle lord mayor Nuatali Nelmes said the council was “delighted to see continued strong development across Newcastle”.
“City of Newcastle has facilitated the growth in DAs through sensible, clear planning that has identified growth corridors such as Adamstown,” she said.
“We encourage development that is consistent with the city’s development control plan and which ensures that legitimate concerns of affected residents are addressed.”
